The United States has revoked licenses that allowed companies such as Intel and Qualcomm to ship chips used for laptops and handsets to Huawei Technologies, a sanctioned Chinese telecoms equipment maker. The move was confirmed by the U.S. Commerce Department, but the companies affected were not named. Some of the companies were notified that their licenses were revoked immediately. This action comes after backlash from Republican lawmakers, who were critical of the release of Huawei’s AI-enabled laptop powered by Intel’s new Core Ultra 9 processor. The Commerce Department stated that it has revoked certain licenses for exports to Huawei but did not specify which ones.
The decision to revoke licenses is seen as a move to bolster U.S. national security, protect American ingenuity, and diminish China’s technological advances. Republican China hawks in Congress have been pressuring the Biden administration to take stricter action against Huawei. This move could have implications for both Huawei, as it relies on Intel chips for its laptops, and U.S. suppliers that do business with the company. Intel has also been facing weak demand for its traditional data center and PC chips, resulting in a loss of stock market value.
Huawei was placed on a U.S. trade restriction list in 2019 due to concerns about potential spying on Americans and efforts to limit China’s military capabilities. Despite this, suppliers to Huawei have received licenses worth billions of dollars to sell goods and technology to the company. Intel, for example, has been shipping central processors to Huawei for use in its laptops since 2020. Qualcomm has sold older 4G chips to handset makers with a license from U.S. officials in 2020. However, Qualcomm still licenses its 5G technologies to Huawei, with a patent deal set to expire in 2025.
Critics argue that these licenses have contributed to Huawei’s resurgence in the market. Despite export restrictions, Huawei managed to release a new phone powered by a sophisticated chip manufactured by a Chinese chipmaker. The phone and the company’s smart car component business contributed to a spike in smartphone sales and revenue growth for Huawei. The growth in Huawei’s business has raised concerns about the effectiveness of U.S. sanctions and restrictions on the Chinese company, as it continues to expand its technological capabilities and market presence.
